by Ted Needleman
Magnetic ink character recognition printing software - better known as MICR - addresses some major pain points for accounting professionals by enabling them to just print their own firms’ checks and to print payroll or accounts receivable checks for clients. Keeping track of pre-printed check stock is the pain, and the more types of checks that you need to print, the greater the inconvenience.
MICR printing lets you use blank safety stock, as it prints the entire check, including the signatures if you wish, in one pass through the printer. In fact, you could probably print the check on plain paper, except that safety stock makes it much more difficult to alter a printed check. This capability lets you use the same check stock for all of your clients, and for all of your check printing needs.
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In turn, this can save you big bucks on pre-printed checks, and eliminate the hassle of managing different checks for various clients.
To some extent, MICR has become mainstream. Many of the top payroll programs include MICR check printing capabilities as a standard feature or as an add-in option. Other check producing applications, such as accounts payable, also offer MICR capabilities.
However, the MICR applications offered as options with other types of software may be very expensive, or not well implemented. That leaves room for the vendors reviewed here.
When MICR was originally developed in the 1950s, magnetic ink was a new technology, and banks, clearing houses and the Federal Reserve system made huge investments in technology to accommodate the automated clearing and routing system. The magnetic check readers used in this process are expensive, and many banks are loath to replace any equipment that still works.
At the same time, the current state of the art is optical, not magnetic. Optical check readers are easier to maintain, more accurate and faster. They are, unfortunately, also expensive, so banks are replacing the old magnetic check readers with optical units only as budgets permit, and needs dictate.
Whether optical or magnetic readers are used in a particular bank, the MICR line itself is still the same. It contains routing and transit numbers, and account information for the checking account that will be charged for the check.
The check number and amount is keyed onto the MICR line as the check is processed, not when it is generated. The MICR font and special character set is well defined, as is the placement and positioning of these characters on the check. As long as these definitions are followed, an optical reader will accurately read a correctly generated check.
For magnetic readers, the toner must have a specified degree of magnetism. Standard laser toner may provide this degree, since it is made from powered iron oxide in a plastic binder. Special MICR toner, however, is guaranteed by the vendor to provide the magnetic characteristics necessary to be read by a magnetic reader.
